ANNEXATION IN HOME-RULE CITIES:STEP-BY-STEP
Texas Municipal League
Municipal Annexation Conference
May 13, 2016
YOUR NAVIGATORS FOR TODAY:
• Chance Sparks, AICP, CNU-A
• Director of Planning, City of Buda
• Texas Chapter of American Planning Association TML
Affiliate & Legislative Liaison
• George Hyde
• Partner, Denton Navarro Rocha Bernal Hyde & Zech
• City Attorney for several Texas cities
• Kim Mickelson, AICP
• Of Counsel, Olson & Olson
• City Attorney for several Texas cities
• Texas Chapter of American Planning Association
Director
“Without exception, affected property owners who spoke at the hearings expressed their hatred of annexation’s effects. They especially hate paying city taxes and permit fees, complying with city codes and ordinances, and being denied elements of a lifestyle that attracted them to their properties in the first place. Burning brush and shooting varmints seem to be paramount among the latter.
--Weatherford Star-Telegram, June 19, 2007
OVERVIEW OF TOPICS
• If you see a code reference in this presentation (§43.052(c)), it is
Local Government Code unless otherwise stated
• Before You Contemplate an Annexation – things you need to take
care of
• Due Process – why procedural accuracy matters
• Involuntary Annexation
• The Annexation Plan – Three Years of Precision Marching!
• Annexations Exempt – Dodging Bullets, but Mind Your P’s & Q’s
• Voluntary Annexation
• Disannexation
• Consideration of other city policies to make your life easier
• Utility extension policies
YEARS OF PRECISION MARCHING!
• It might look impossible, but it’s
not!
• Annexations inconsistent with
procedures are voidable!
• Disclaimer: Our advice is only
as good as what YOUR city
attorney will defend!
PLAN AHEAD – BEFORE YOU CONTEMPLATE AN ANNEXATION
CONSIDER A POLICY
• Why are you annexing? Legally it doesn’t matter, but from a policy perspective you need to have a clear
purpose/reason… ANALYZE! Consider adoption of an annexation policy.
• Tell the story of why you annex, what you consider/evaluate
• Not a legal requirement, but a really good idea
• Creates institutional knowledge that carries across administrations
• Sets the stage for analysis that helps to determine if annexation is
the right choice for the City in addition to the affected
property owners
• Gives elected officials something to lean back on
• Remember: You can have substantial changes in elected bodies in
the three years
• Best Example: City of San Antonio
WHAT TO CONSIDER IN YOUR ANNEXATION POLICY
• Overview
• Purpose & Intent
• Background, Histories & Strategies
• Policy Introduction
• Policy Statements
• Evaluation of Areas Based on Existing or Planned
Level of Development
• Evaluation of Areas Based on Service Delivery
Needs
• Evaluation of Areas Based on Need to Protect
Public Health, Safety, and Welfare
• Evaluation of Areas Based on Intergovernmental
Relations
• Evaluation of Areas Based on Fiscal
Considerations
• Considerations for the Issuance of Non‐Annexation
Agreements
• Annexation Program
• Preparation
• Location Selection Criteria
• Municipal Services to be Provided
• Fiscal Impact Analysis
• External Communication
• Annexation Plan (structure as addendum)
• General Provisions
• Full Purpose Annexation
• Exemptions from Annexation Plan
• Limited Purpose Annexation
BOUNDARY AGREEMENTS
• One of your goals in annexation should be
“rational administrative boundaries”
• Using Interlocal Agreements to establish
future boundaries (city limits and/or ETJ)
between cities Considerations when
creating:
• Property lines
• Watershed boundaries
• Water & sewer infrastructure planning
• Census boundaries
• School districts
• Roadways not always best – can lead to
issues with driveway permits, police
jurisdiction, development exactions, etc.
NON-ANNEXATION DEVELOPMENT AGREEMENTS
• §43.035 requires offering of a non-annexation development agreement for
agricultural/timber tax exempt properties
• Appraisal District coordination
• Suggest doing them independently of an active annexation process
• Allows you to make argument that you are trying to protect them
• Removes the pressure of the annexation timeline
• Manage staff resources
• Helps you with contiguity requirements; Can help with dimensional requirements since
treated as contiguous
• Document offers, property owners declining, property owners not responding
NON-ANNEXATION DEVELOPMENT AGREEMENTS – COMMON COMPONENTS
• Remember Legislative Intent… and the State you
are in… be reasonable
• Guarantee to continue as ETJ as long as terms of
agreement are met, up to 45 years
• Owner promises to stick with agriculture, wildlife,
timber & related incidentals
• Owner promises not to file a development document
• Violation automatically triggers a petition for
voluntary annexation; no vesting
• City can enforce all city regulations & planning
authority that don’t interfere (suggest cross-
referencing your agricultural zoning if you have it)
• Record in county records to run with land
LEGAL DESCRIPTIONS & LOCATION QUALIFICATION
• Importance of an accurate legal description
• Is it in your ETJ?
• Is it in a neighboring city’s ETJ? Is it a petition, or is it involuntary?
• ETJ verification or property ownership §43.051
• Play nice with neighbors if it is in another city’s ETJ §42.022(c) & §42.023
DONUTS & CHICKEN STRIPS
• 1,000 foot dimension standard
• Exemptions under 43.054(b)
• Strip annexations §43.0545
• Dangers of donut creation §43.057
• Is it in the public interest?
STRIP EXAMPLE
• < 1,000’ wide
• Touches on 2 sides
• Or touches another
jurisdiction
• < 1,000’ wide
• Touches on 1 side
• > 1,000’ wide
• Touches on 1 side
DONUT EXAMPLE
PLAYING WELL WITH OTHERS
• Water/sewer districts… beware of
financial penalties §43.071 and §43.072
• ESDs… §775.022 (health safety code)
• If you have these in your ETJ, consider
negotiating strategic partnership
agreements now.
• Can arrange for limited purpose
annexation to collect sales tax (address
free-rider)
• Can negotiate any number of factors…
application of building codes/permitting,
etc.
CONSIDER LEGAL IMPLICATIONS EARLY
• Voting rights act… preclearance not necessarily required, but VRA compliance still
is. §43.906(b)
• Donuts are particularly dangerous
• Take service plans seriously (see other session)
• Not just a bureaucratic exercise
• Do you REALLY have capacity?
• Do you REALLY have the ability to provide good
services?
• If your plans are all 100% identical, tread with
caution
KNOW YOUR LIMITS
• Just because you can, doesn’t make
it a good idea
• Can annex 10% of your land area
each year
• Can carry over to following years,
but can’t exceed 30% of your land
area in any given year
• §43.055
TRANSPARENCY REQUIREMENTS
• Posting on website – content, format, etc.
• Publishing in newspaper – content, format, etc.
• Letters to Service Providers, school district,
etc. – content, format, etc.
• To certify or not to certify
• Letters to property owners
• Public Hearings
• Things that aren’t required, but are a really,
really good idea:
• FAQs in plain English
WEBSITE
• Make all aspects easy to find
• Annexation Policy if you have
one
• Annexation Plan posting
• Posting of Hearing Notices
• Posting of Service Inventories &
Draft Service Plans
• FAQs
NEWSPAPER NOTICE
• Adequate description that average Joe can understand
• Addresses if possible
• Solid boundary description in plain English
• Best: publish a map! ($$$)
• Date/Time/Location of hearings
• Directions for how to make comments
• Contact information
• Website link for more info
LETTER TO PROPERTY OWNER
• Owner contact based on appraisal district information
• Adequate description that average Joe can understand
• Addresses
• Solid boundary description in plain English
• Best: provide a map!
• Date/Time/Location of hearings
• Directions for how to make comments
• Contact information
• Website link for more info
• Include FAQs if you can
FREQUENTLY ASKED QUESTIONS
• How will police offer more services & safety when we already get Sheriff ’s patrols?
• Station proximity; personnel per city population compared to county; special/unique
programs
• How will implementing zoning allow City to protect & defend property values?
• Can protect against undesirable uses coming in and reducing property values
• Why would the city want to annex property that will provide such little value?
• Growth management and importance of projects being built to city standards
• If I already pay for & receive city services, what benefit is there to me?
• Rate differentials, auto/home insurance differences, land use protection
FREQUENTLY ASKED QUESTIONS
• Is the city annexing for the purpose of charging property taxes to landowners?
• Don’t say yes… you don’t see a bit of tax money until the year following the year you
annexed… if you annexed February 28, 2016, you won’t see any tax until the property tax
bill due in January 2018.
• I have horses and other livestock… Can we keep our animals?
• Nonconforming uses & Ag-Exempt Non-Annexation Agreements
• I have a well & septic system… do I have to switch?
• No. Only required for new projects or when existing has failed and is within ___ feet of a
line
FREQUENTLY ASKED QUESTIONS
• Are Landowner comments being ignored?
• Opportunity to explain how public hearings work – one-way communication
• Is the city planning to expand or widen roads in this area?
• Will the city allow landowner participation in future development plans?
• Comprehensive plans, zoning case processes, ability to serve on boards/commissions
• How will the City pay for infrastructure?
• Public infrastructure usually drive by private investment (developer pays)
LETTER TO SERVICE PROVIDERS & ENTITIES
• You should have good contacts for all of your service providers & other entities
• Adequate description that average Joe can understand
• Addresses
• Solid boundary description in plain English
• Best: provide a map!
• Date/Time/Location of hearings
• Directions for how to make comments
• Contact information
• Website link for more info
• Special content & timing requirements (especially school district fiscal; railroad must be certified)
PUBLIC HEARINGS
• State laws don’t specify who should hold the hearings, but
should be someone that is part of decision process
• Just a hearing before the City Manager might technically
comply, but is not intent
• Use of a Commission or City Council committee might be okay
if they are part of the process (recommending body?)
• Hearing before City Council is the best
• Think about your agenda posting: do you want discussion,
or just one-way receipt of comments?
• Give lots of directions in your notice so people know what to
expect – this is likely their first interaction with a
governmental board or elected body
• Affect of Protest
PUBLIC HEARING 2-STEP DANCE
• Two public hearings that take place 20-40 days prior to 1st
reading of the ordinance
• You can do more
• Don’t forget your website!
• Notice in newspaper 10-20 days prior to each hearing
• Just publish notice of all hearings for multiple weeks to comply
• Property owner & service provider notice
• 30+ days prior to public hearings
• Include all planned public hearings in notice
• Special content for school district, with special timing
THE ANNEXATION PLAN
ANNEXATION PLAN
• Your City is REQUIRED to have an Annexation Plan, even if you only plan to annex
properties that are exempt from the 3-Year Plan-Based Annexation Process
§43.052(c)
• Municipality shall prepare an annexation plan that specifically identifies
annexations that may occur beginning on the 3rd anniversary of the date the
annexation plan is adopted §43.052(c)
• Can be amended, but 3 year rule applies to each property – advice is to maintain each
date series as a separate document for ease of use/reference
• Be smart & consistent with dates – make it easy on yourself
• Mindful of special districts (see other session)
• Have a conversation with your county early
ANNEXATION PLAN
• Be careful removing from plan. If the plan is amended
to remove an area during the first 18 months after an
area is included in a 3-year annexation plan, then the
municipality may not amend the plan to again include
the area for 1 year after the date of the amendment.
But if the amendment to remove the area occurs
during or after the 18 months following the month an
area is included in the 3-year annexation plan, then
the municipality must wait 2 years before again
amending the plan to include the area §43.052(e)
• Don’t blow it at the end… if you make it all the way
through and then don’t annex, you can’t annex it for 5
years!
ANNEXATION PLAN WALK-THROUGH
• Content
• Relationship to an Annexation Policy
• Best practices
• Ease of document use
• Clarity of process
• Checklists for each area
• Your Plan should help tell the story of the
annexation
• Why
• Address likely concerns up-front
NO THANKS… NOT INTERESTED IN AN ANNEXATION PLAN
• The City of ___________________ has no
plan to annex any lands within the next
three years unless such is exempted
from LGC § 43.052(h)
• If you are going to annex an area under
your annexation plan that DOES NOT
meet an exemption or IS NOT
voluntary, be mindful of staff capacity
ANNEXATION THROUGH ANNEXATION PLAN
• The importance of additions & deletions… especially deletions.
• Don’t bother until you’ve checked on 43.035 Non-Annexation Development Agreement requirements
• Day 1: Area placed in annexation plan
• Day 90: Notice provided to landowners; request of inventory from service providers §43.052(f) §43.053(c)
• Day 180: Last day for provider to furnish inventory unless extension agreed to §43.053(c)
• Day 240: City must compile & publish inventory of services; begin preparing service plan §43.053(g)
§43.056(j)
• Day 330: Give notice & conduct two public hearings by this day (no more than 90 days after inventory
published) §43.0561 §43.905
• Publication/notice requirements
• Timing requirements
INVENTORY
• §43.053
• Type of service, method of delivery, other specifics
• For utilities, roads & drainage:
• Engineer’s report on physical condition
• Summary of capital, operational & maintenance
expenditures for that infrastructure
• For police, fire, EMS:
• Average dispatch & delivery time
• Equipment schedule, including vehicles
• Staffing schedule, including certification & training
levels
• Summary of operating & capital expenditures
ANNEXATION THROUGH ANNEXATION PLAN
• Day 360: Hold negotiations with property owners and special districts for provision of
services after or in lieu of annexation §43.0562
• County coordination! Do you get along?
• Day 540ish (depends on month): Before 1st day of 10th month after the month in which
the inventory was prepared, final service plan should be prepared & published
§43.056(a)
• Day 1095: 3rd anniversary of the date the area was placed in plan. Cannot annex before
this date. Post notices for ordinance §43.052(c)
• Day 1125: Annexation bust be completed before the 31st day after the 3rd anniversary of
the date the area was included in the annexation plan §43.052(g)
• If the annexation is not completed within that time, the municipality may not annex the
area before the 5th anniversary of the last day for completing an annexation. §43.052(g).
NEGOTIATIONS
• Commissioners Court (yes, you read
that right) selects five people in
annexation area to negotiate with city
for provision of services after
annexation
• Can create a binding agreement in
lieu of annexation
• Land use?
• Application of certain ordinances?
• Arbitration
SERVICE PLAN
• Required for annexations under a plan,
exempt annexations, EVERYTHING
• Must provide for “full municipal
services” to the annexed areas
• Means all services provided within its
full-purpose boundaries, unless land
topography, land use or population
different
• Must be available to the public before
the public hearings
• Recommendation: have it developed &
posted to your website before you send
notifications
SERVICE PLAN
• Immediate:
• Police, Fire, EMS
• Solid waste, water, wastewater
• Roads, parks, other existing facilities
• Capital Improvements for full services must be completed within 2.5 years
• Can get extension to 4.5 years if city can demonstrate it is unreasonable to provide in
that time frame
DODGED BULLETS: EXEMPTIONS TO THE ANNEXATION PLAN REQUIREMENT
• LGC § 43.052(h)
• 100 Tracts Exemption
• Any number of tracts, so long as no more than
99 contain residential dwellings
• Annexation with 50% of Owner Approval
• Petition by 50%
• 50% vote
• Special Districts
• Several other odd/rare exemptions
• Don’t get cute – Don’t manipulate
EXEMPT ANNEXATION
• There is an expedited version of this calendar, but be very, very careful
• Development Agreement under 43.035
• Day -21: Resolution setting public hearings & directing notice; Send written notice to property
owners and entity notices 30 days prior to public hearings §43.052(h)(1) §43.062
• Day 1: 10-20 days prior to 1st hearing, Publish hearing notice, post on web, send notice to school
district, send notice to railroads with ROW §43.063 §43.905
• Good time to post draft service plan to website
• Day 12: Hold 1st public hearing 20-40 days prior to the first reading of the annexation ordinance
§43.063
• Day 15: Publish notice of 2nd hearing, post on web, §43.053 §43.063(c)
• Day 26: Hold 2nd public hearing 20-40 days prior to the first reading of the annexation ordinance
§43.063
• Day 47: Adopt Annexation Ordinance (Institution of Proceedings*)
• Day 136: Ordinance requiring more than one reading must be passed by this date
BATTING CLEAN-UP
• Update Official Maps
• Comply with Voting Rights Act Requirements
• Notify required state offices (State, Comptroller,
etc.)
• Appraisal District
• Telecoms, Gas companies, other franchises
• Record with County Clerk
• Sales tax is implemented quickly following state
notices
• Property tax goes into effect January 1 of the year
following annexation
• Follow your service plan… or else…
DISANNEXATION
• 43.141 provides method for citizens to petition
annexation for failure to provide services
• Petition standards listed in code; fairly strict
• If city refuses to disannex within 60 days of
petition, petitioners can file in district court of
the county
• Refunding taxes & fees
• If disannexed, can’t touch it for 10 years
• Not in the statute: a disannexation is an efficient
way to shorten your career as a public servant or
elected official—take annexation & annexation
service plans seriously!
I’LL SEE YOU IN COURT
• Lawsuit
• Void acts – may only be brought by landowners
• Legal description doesn’t close
• Land not in eligible area
• Voidable acts – Quo Warranto. Brought by
state’s attorney. Citizen may request suit, buit
suit is at state’s discretion
• Procedural errors
• Constitutional problems
• Statute of Limitations
• Mandamus actions: 2 years
• Others by validating statutes: LGC 51.003, 3
years if act not void
LESSONS TO TAKE AWAY
• Follow procedures to the letter
• Maintain the record
• Be up-front & honest – save yourself the pain
• Monitor the cities around you… and work together!
• Be creative in considering other alternative methods to manage growth
• The TML website is super-handy